37signals – Changing Way

37signals, One Suite

I’ve long been an admirer of 37signals. Today, Jason Fried announced the 37signals suite. The suite comprises 4 web apps: Basecamp, Highrise, Backpack, and Campfire. The last of these is for online chatting, the first three for managing, respectively, projects, contacts, and stuff.

There are three pricing options, starting at $99/month. It’ll be interesting to see how and if that changes. 37signals like to keep things simple, while some of their clients will have “but I want more of this and less of that with price more like that” comments.

It’s interesting to see that this is not a freemium offering. There is no $0 small-scale or trial version of the suite.

37signals is the best example I know of a firm with a strategy. By strategy, I mean propensity to respond to requests with: No, that’s not what we do. In particular:

37s takes a hard line against feature creep. To make it into a product, a new feature has to add a lot more in terms of useful function than it does in terms of clutter.
37s does not believe in losing money to gain clients. It has always priced for profit. There are $0 versions of the apps, but they are intended for trial, not for extended free-of-charge use.

In terms of my own use, I like the first of these things a lot more than I like the second. One of the reasons I stopped using Backpack was because my use outgrew the $0, but my inclination to pay didn’t. I do currently use Highrise.

What should 37s do next? Well, what I’d like them to do is a Learning Management System (LMS). A ruthlessly uncluttered LMS would allow focus on learning from the course, without wasting cycles navigating the LMS. But I don’t think that an LMS is on the 37s radar, and so I’ll keep on writing about other LMSs.

Nonprofits

It’s been a nonprofit kind of month. The first session I got to at WordCamp Mid-Atlantic was Geoff Livingston on nonprofits.

More recently, I just set up a website for my daughter’ school’s PTA. Earlier this month, I posted about PTA websites, and got some good advice.

Some of the more interesting posts recent posts at Mashable have been in the Social Good category. One of these posts even defines the term social good: equal parts online fundraising and advocacy via social networks.

Then there’s the post in which Jason F of 37signals asks:

Why should a non-profit organization pay less for software (or supplies or food or rent or…) than a for-profit company? How is an automatic discount for a non-profit fair to a full-price paying for-profit?… The best pricing is clear, fair, public, consistent, and predictable.

By consistent, Jason means the same for enterprises, small businesses, nonprofits, etc. The ensuing comments make for interesting reading. I was surprised at how many come from people in nonprofits who agree with Jason.

WooThemes

WooThemes is Bootstrapped, Profitable, & Proud, according to 37signals’ Matt. As its About page/comic illustrates, Woo is in the WordPress theme business.

Woo has much in common with Automattic, the firm behind WordPress, and with 37signals. All three firms are distributed: Woo has three principals, one each in South Africa, England, and Norway.

As someone who has written about the WordPress ecosystem, I was struck by this quote from Woo founder Adii Pienaar.

We have created a niche, micro-economy, where a lot of our users — specifically the designers and developers — are selling add-on services that relate to our themes in one way or another… So we’re finding that users are helping each other on our support forums, while also building their own businesses using our themes.

Woo didn’t just find a niche for itself: it created an ecosystem within the WordPress ecosystem. It is now exploring other publishing platforms/ecosystems. For example, there are now Woo themes for Drupal.

Woo particularly impresses 37signals by being like 37signals. Neither firm took venture capital, and each has grown “organically,” from profits, without taking investment from outside.

Woo’s About page/comic refers to WordPress default themes as boring. I’d say that has ceased to be true now that WordPress 3.0 comes with Twenty Ten as the default theme. But it looks as though Woo, its brand, and its ecosystem have arrived at the point at which it doesn’t need other themes to be boring in order to stand out.

Talking of the Woo brand, I came across what I think of as a neat bit of brand-building when I was upgrading blogs at WanderNote, which lives at BlueHost. Use of Simplescripts there is “sponsored by WooThemes Get a fresh new free or premium WordPress theme!” Upgrade and installation are good times to tell WordPress admins about theme options.

I’d be interested to read your impressions of WooThemes: the themes, the organization, the way in which it has grown? Mine are fairly positive, although I’ve yet to use any Woo themes myself.

Freemium the 13th

If “we” had to throw away “our” jargon – blogosphere, Web 2.0, social media, and so on – and could keep one term, I would vote to save freemium. I like portmanteau words: wijard = widget + card, freemium = free + premium, etc.

Dries of Drupal, Acquia, and Mollom fame posted earlier today about freemium as used in his projects. His remarks on Mollom are particularly interesting.

We currently have more than 3000 active users that use Mollom for free. Say each user spends on average 15 minutes a week moderating his site’s content and reporting classification errors to Mollom. Mollom learns from this feedback and automatically adjusts its spam filters so that all other Mollom users benefit from it. At a rate of $10 USD/hour, we get $390,000 USD worth of value from free users a year — 3000 users x 15 minutes/week x 52 weeks/year x 10 USD/hour = $390,000 USD/year. If these numbers hold up, the value of a free Mollom user could be estimated at $130 USD/year. And that doesn’t include the marketing value they add.

Meanwhile, Chris of the Long Tail identified four different freemium models. One of these is the “feature limited” model, of which WordPress.com is an example. I pay to make this blog changingway.org (as well as changingway.wordpress.com). By the way, WordPress.com is an example of multiple free business models, not “only” of freemium.

The first comment on Chris’s post is by Ben Watson (no relation). “New platforms are often hard to learn, and you can ease rapid adoption by not putting all the bells and whistles on the free version” is a strong argument in favor of the “feature limited” model.

If there is a black belt in the art of freemium, it is worn by 37signals. Looking at the options for my Backpack account, I see a combination of the “feature limited” and “seat limited” freemium models. For example: my free account allows me 2 users, 5 pages, and no storage; a solo account would cost $7/month and give me 100 pages, a shareable calendar, and some file storage; and so on.

Long live freemium. I like, not only the word, but also what it stands for and what it gives me: good software at no charge; more features, if I am willing to pay; and something interesting to write about.